The IFP model presents challenges for the income shock process that we described in Section REF . In the macroeconomic literature on income fluctuation (and indeed also in the work by [1]}), shocks are assumed to present in a stochastic form. Thus, while there is randomness in the shock generation process, it is a predictable kind that can be optimized for (in an expected sense). However, shocks generated by an external decision cannot be optimized for in the same way (and indeed, this is an important element of precarity). In our simulation, we think of the optimization process as happening in epochs between decision points. This model captures the idea that long-range planning is constrained by decision points that the individual has no control over.
